A federal judge on Thursday evening threw out a painstakingly negotiated settlement between the maker of the prescription painkiller OxyContin and thousands of state, local and tribal governments who had sued the company for its role in the ongoing opiate epidemic.
The judge in the US District Court for the Southern District of New York said that the settlement should not be allowed because it released the company's owners, members of the Sackler family.
The Sacklers made the condition that they contribute $4.5 billion to the settlement agreement if they did not file for personal bankruptcy protection.
Judge McMahon said that the bankruptcy code doesn't allow a judge to grant such releases.
The question is whether the bankruptcy court is statutorily authorized to grant such releases.
